Understanding your competitors and monitoring their activity is key to your success.
In fact, I often point out that if you have no competitors, you may not have a market. Meaning that if you are planning to launch a new product or service, a lack of competitors might mean that no demand exists for your product/service.
Oftentimes for new offerings, your competitors are "indirect competitors," meaning that they fulfill the customer's needs with a different type of product or service offering. Conversely, direct competitors are those who fulfill the same need with a similar type of product or service offering.
Regardless of whether your core competitors are direct or indirect, you should always keep an eye on what they are doing. Mainly, so you can learn from them. If your competitors are able to acquire customers more inexpensively than you, you have a problem. Likewise, if competitors are able to generate more customer lifetime value than you, you will be at a distinct competitive disadvantage.
In this regard, there are three free tools I want you to know about.
The first is ChangeDetection.com (http://www.changedetection.com/). ChangeDetection.com provides page change monitoring and notification services. It really couldn't be simpler. You simply type in your competitor's website addresses, and whenever it changes one of its web pages, you are immediately notified via email. Pretty cool. If one of your competitors changes its prices, or adds a new product or service, or decides to test new text to promote its benefits, etc., you are immediately notified.
The second cool tool is KeywordSpy.com (http://www.keywordspy.com/). KeywordSpy allows you to see how your competitors are marketing themselves online. Among other things, you can see the keywords that your competitors are advertising on, their estimate ad budgets, and what keywords they rank organically on. This analysis allows you to identify where your competitors are getting their best online traffic, so you can replicate it.
The final tool I want you to know about today is Compete.com (www.compete.com). There are two features of Compete.com that I really like. The first is that, using their "Compare Sites" tab, you can compare the traffic of up to 3 websites for a period of up to 2 years.
Using the "Site Profile" tab, you can see online traffic details of individual sites. Within the premium features of Site Profiling, you can see the demographic profile of site visitors and the sites that refer the most traffic to them.
This is really cool. To begin, knowing the demographic profile of your competitor's customers could dramatically help in your marketing efforts. Secondly, if you know the sites which refer the most traffic to your competitors, you can contact them and try to get links to your website included there too, so you can "steal" some of this traffic.
Really understanding your competitors and leveraging this understanding will improve your marketing and operations. Similarly, in your business plan, showing a comprehensive understanding of your direct and indirect competitors positions you as an expert in your market, which is very appealing to investors and lenders.
If you need help with the Competitive Analysis section, or any other section of your business plan, download Growthink's Ultimate Business Plan Template.
If you need help with your Internet Marketing efforts, and using the above tools to increase your profitability, download Growthink's Ultimate Internet Marketing System.
Long story short, last year, the American Recovery & Reinvestment Act dedicated a lot of money to supporting SBA loans.
And since the passage of the Act, the U.S. government has repeatedly increased its ante, guaranteeing more and more SBA loans.
According to National SBA Administrator Karen Mills, "thousands of small businesses across the country have taken advantage of these Recovery loan enhancements to get the capital they need during these tough economic times. The increased guarantee and reduced fees on SBA loans helped put more than $23 billion into the hands of small business owners and brought more than 1,100 lenders back to SBA loan programs."
That's $23 billion, with a "B."
Mills also said that the average weekly loan approvals by the SBA (as of April 2010) have increased by 86% compared to the weekly average before passage of the American Recovery & Reinvestment Act.
So, the time may be right to get an SBA loan to fund your new or existing business.
To access SBA and bank funding for your business, download Growthink's Step by Step Guide to Raising Capital From Banks and SBA Lenders.
Recently, I was unloading the dishwasher. I'm about half way through and came to a dish that just wasn't very clean. Then another one. And so on.
Since then, my wife and I have taken a bunch of steps to fix the problem (I'll tell you about those in a moment).
Then, this morning, I started thinking about all these steps, and noticed some interesting marketing lessons. I figured you'd find them valuable, so I wanted to share them with you.
Step 1: The first thing I did was go to the Internet to try to solve the problem myself. I Googled "dishwasher top rack not cleaning" since the dishes on the bottom seemed fine.
I read a couple forum posts on this, and realized I didn't have the technical skills to solve this on my own.
Lesson: Expect your customers to have some knowledge about your products or services. Note that this knowledge may not be accurate based on where they learned it (e.g., from a web forum post from Joey in Idaho).
Step 2: So, my wife called an appliance repair guy who she found by doing some local searches online.
Lesson: Make sure you (and not your competitors) are easily found online.
Step 3: The repair guy came, gave us a bill for $95.07 for showing up and diagnosing the problem. He said that it would cost about $300 to fix it, but that the dishwasher was installed in 1994 (16 year ago; well before we bought the house) and that it was probably a better bet to just buy a new one.
Lesson: The repair guy gave us advice that was good for us (don't do the repair, buy a new dishwasher) and bad for him (him losing out on the $300 charge). We decided to buy a new dishwasher. But, since he was honest and gave us good advice, we will use this repair guy again and definitely recommend him to others if ever asked. So, do the right thing now, even if you have to forego short-term profits, and you will get rewards later.
Step 4: I looked online for dishwashers. What I cared about in the purchase were the following: price, cleans well, time savings (i.e., don't need to rinse dishes before loading), looks nice (we wanted a stainless steel front), and is relatively quiet.
Lesson: not every customer cares about every feature. Many of the dishwashers promoted 9 different programs and cycles (like special cycles for glassware). My wife nor I have ever used these, so we didn't care too much about them.
Another lesson: I looked at customer reviews online to see what others said about the different dishwasher models. If you sell someone a product or service, you should follow-up with them to make sure they are satisfied (or to satisfy them if they are not satisfied). Because your customers may post their comments online (or offline) which will influence your future sales.
Step 5: I bought the dishwasher. I paid extra for installation and haul-away of my old dishwasher and bought a 3-year warranty.
Lesson: These add-on sales increased the total sales price by 24% and must have increased their profits by a lot too. And these upsells were things that I wanted. The lesson is that you must upsell your customers by offering them items that will better satisfy them.
Final lesson: My wife and I don't represent every shopper. Not every shopper goes online to try to solve a problem themselves or to compare products. Not every shopper doesn't care about certain product features. And not ever shopper is going to take your upsells.
But, make sure you figure out your main customer segments, think about how they will buy and make decisions, and create sales and marketing strategies that are in line with this.
On Monday, the U.S. Environmental Protection Agency (EPA) awarded $2.38 million to 34 small businesses to develop innovative, sustainable technologies to protect human health and the environment.
And the EPA is not alone. There are 25 other federal grant-making agencies that are funding new and existing businesses. These include the Department of Agriculture, Department of Commerce, Department of Defense, Department of Education, and the Department of Energy among others.
And, on top of this, there are tons of state and local grants available to businesses.
The key negative with grant funding is that grants typically fund "projects" and not "companies." For example, a grant is often used to fund the project of developing a specific product or service. However, oftentimes that product can become the basis for a great company.
The key positive with grant funding is that you don't need to repay it, nor do you need to give up equity in your company for it. That's pretty cool.
I think that too few entrepreneurs know enough about grant funding and don't go after it.
To access grant funding for your business, download Growthink's Step-by-Step Guide to Raising Capital for Your Business from Grants.
I recently read about a smart tactic a Fortune 500 marketing manager used to increase sales by 10%.
I think you'll find it useful. And I think it's something you can implement right away to improve your sales. But what I'm even more excited to tell you about is what the manager did wrong. Which, when done right, should increase sales by even more, perhaps by 27%.
So, what did marketing manager, Brian J. Maynard, do when marketing his company's Jenn-Air and KitchenAid appliances?
He communicated, using statistics, how his products were superior. And his actions lifted sales and website traffic more than 10%.
"Consumers tell us that what they care about are the results -- ultimately how well the product cleans," Maynard says.
So, Maynard executed on the following plan:
Step 1: Conduct market research
First, his team conducted research to prove that its dishwashers outperformed the competition; it did so by 25%.
And to avoid criticism, they tested according to industry standards established by the Association of Home Appliance Manufacturers.
Step #2. Communicate results in consumer-friendly way
Rather than use jargon, or promote multiple findings from the research, he sited one statistic that was 1) easy to understand, and 2) most important to customers in their decision making process. This statistic was the fact that their appliances yielded 25% better results than the competition.
Step #3. Include the results within all the company's marketing messages
The "improved results by 25%" message was included in all Jenn-Air and KitchenAid marketing efforts including:
- Television advertising
- Search PPC and online display ads
- Website landing pages
- Print advertising
- Point-of-sale displays (e.g., stickers on machines in stores, in-store flyers & in-store banners)
The resulting 10% increase in sales makes sense, doesn't it?
By PROVING, using statistics, that their products were better, and by marketing this improvement in multiple venues, sales increased. All very logical.
So, clearly, if you can conduct research to prove that your products or services are superior, do so. And then tell the world about it.
But, I want you to correct what Maynard did wrong.
He failed to leverage the Law of Specificity which states that specificity encourages believability and credibility.
Specifically, Maynard stated that his products were "25%" better. If he would have said "24.7%" better, the results would have seemed more credible and believable to his target customers. As a result, I expect that sales would have jumped significantly more.
One great example of specificity is Ivory soap, which claims itself to be "99 44/100% pure." Not 99%. Not 100%. By being extremely specific, Ivory's claims are more believable.
So get specific.
FreshPlanet just announced that it raised $1.5 million in Series A funding.
The company creates "Fun games for smart people."
I'm not wowed by any stretch by FreshPlanet. Just another video game company in my book.
But I included it here for just that reason. FreshPlanet is not some ultra-unique product or company. It's just two successful entrepreneurs trying to improve on products in an established industry.
And by putting together the right strategy and plan, and knocking on the right doors, they raised $1.5 million from three individual angel investors and one early-stage venture capital fund.
For those of you who don't understand the term "Series A," the Series A round is the name given to your first significant round of venture financing. The name "Series A" refers to the class of preferred stock that you sell to investors in return for their cash. Your Series A round is typically the first series of stock issued after common stock (which is typically issued and/or sold to company founders, employees, friends and family, and initial angel investors).
If seeking angel funding: Download Growthink's Step-by-Step Guide to Raising Capital from Angel Investors.
If seeking venture capital: Download Growthink's Step-By-Step Guide to Raising Venture Capital.
A while back I started reading a lot of articles on resume writing.
No, I'm not looking for a new job.
But, I realized the similarities between resumes and business plans.
A resume is used to convince a prospective employer that you might be the right job candidate, and that they should invest the time to meet with you to learn more.
Similarly, a business plan is used to convince an investor or lender that you might be the right funding candidate, and that they should invest the time to meet with you to learn more.
(Note that there is a key difference between resumes and business plans. Mainly your business plan also has critical value in terms of plotting your strategy. But when used to convince outsiders (investors, advisors, partners, employees, etc.) to join or fund the company, plans and resumes serve a similar marketing function.)
Interestingly, HotJobs recently developed an article revealing the "10 Boilerplate Phrases that Kill Your Resume." They are as follows:
• Results-oriented professional
• Cross-functional teams
• More than [x] years of progressively responsible experience
• Superior (or excellent) communication skills
• Strong work ethic
• Met or exceeded expectations
• Proven track record of success
• Works well with all levels of staff
• Team player
• Bottom-line orientation
Moving back to business plans, I have often heard investors and lenders complaining about similar phrases in plans such as "proven management team," "first mover advantage," and "dominate competition."
The problem with these generic phrases in both resumes and business plans is that, by themselves, these phrases don't show whether the person or venture is really unique (which is what both employers and investors/lenders want).
Now I'm not saying that you need to avoid these phrases.
Rather, you need to clarify these phrases.
If you have a "proven management team," then you need to state why. For example, maybe one management team member formerly ran a successful company, or another formerly increased sales by 3 times at their last company, etc.
When presented to people outside yourself or your company, your resume or business plans are marketing documents. They are used to convince others to invest time towards hopefully hiring you or investing in your company. In order to be successful, be sure to show how you and/or your venture is unique, and whenever possible, provide specific proof behind your arguments.
If you have not completed your business plan, or are dissatisfied with the results, download Growthink's Ultimate Business Plan Template. Our Template will help you quickly, easily and expertly complete your business plan: http://www.growthink.com/products/business-plan-template
VC-backed exits had a great quarter in Q1 of 2010. (For those who don't understand "VC-backed exits" it means companies funded by venture capital firms which cashed out, which typically happens through being acquired or by going public.)
According to The National Venture Capital Association and Thomson Reuters, VC-backed M&A exits were the highest ever in a single quarter. 111 venture backed companies were sold for $5.86 billion in disclosed value. And nine venture backed companies went public, raising more than $930 million.
Another note to folks seeking VC; in the first quarter M&A (exit by acquisition) was 12.3 times more likely than going public. This ratio is fairly typical.
Another piece of good news is that 79 private equity firms, including VC firms, raised $50.4 billion in Q1 to invest in companies.
So, VCs are generally in a good mood since they've just made big money on their exits, and they now have more money to invest. So start sending out your teaser emails and raising venture capital!
(If you don't know what a "teaser email" is, or you haven't raised venture capital before, it is a very tricky path with lots of landmines. So download our Step-By-Step Guide to Raising Venture Capital so you can successfully raise venture capital.)
Like many of you, my first full-time job wasn't as an entrepreneur. I too "worked for the man" and earned my steady paycheck. And each month, I advanced a little. But never as quickly as I wanted.
And what did this cause?
It caused me a lot of stress, discomfort and anxiety.
I was in a position that I wasn't comfortable with. I wanted something better.
The other day I realized what I really had been feeling was a lack of control, which in turn caused my stress and discomfort.
In fact, according to the new book, The Art of Choosing, by Sheena Iyengar, the ability to make our own decisions is critical to our sense of well being.
For example, studies show that it isn't the company's CEO who's most likely to have a stress-related illness or heart attack. No. It's actually the CEO's assistant! Research shows that the less control we have, or that we think we have, the higher the likelihood of stress, back pain, mental illness, high blood pressure, getting sick, and so on.
So what does this mean for you?
1. If you're still working for someone else, and are feeling the stress of not controlling your destiny, then now's the time to launch your own business. I'm not necessarily saying to quit your job until your business is generating income. But I'm saying to at least take pen to paper and write down your business plan and strategy so you can start planning out your venture. (As you know, I designed my business plan template specifically to help with this).
2. If you are running your own company, make sure that you give enough authority to your employees. You don't want your employees to feel a lack of control. This will lead to stress and they will get sick more often, won't be as productive, and so on.
Note that I will be releasing a new Leadership course later this month that reveals lots of leadership tips, but to start, make sure your employees have some decision-making authority and a feeling of being in control within their areas of responsibility.
I recently interviewed sales expert Marvin Montgomery.
And I don't use the word "expert" lightly....Marvin has 30 years of sales training experience, served as director of sales for one of the country's largest jewelry store chains (where he trained over 1,200 associates in 95 stores) and is the author of the book "Practice Makes Perfect: The Professional's Guide to Sales Success."
Marvin gave me tons of great sales tips during the interview, but one thing really stood out to me.
He told me he'd been invited to the weddings of people to which he has sold products and services. Now, these were NOT people he knew beforehand. But people that he met when trying to sell them something.
Imagine that for a moment. Inviting your salesman to your wedding. You get a phone call from a salesperson. Or you're at the department store and a salesperson is trying to sell you a vacuum. And, then, a few short months later, you're inviting them to your wedding!
Marvin and I both agreed that this is the ultimate sales test - if your prospects and/or customer invite you to their wedding, you are truly a great salesperson!
Now, to accomplish such a feat, Marvin explained that you need to start by having a "servant mentality" and really listening to and serving the needs of your prospects. By doing so, you create real, lasting human-to-human bonds, which will massively increase your chances of making the sale.
Remember, people (not companies if you are selling to businesses) make buying decisions. And a key part of a person's buying decision is how they feel about the salesperson. Your job is to make the prospect feel good about themselves, which will make them like you more!
In the interview, Marvin focused on the "3 R's" of selling: Repeat business, Referrals, and Requests.
You can listen to the full interview here, but here's a key point that he mentioned for each.
Repeat business: repeat business starts by satisfying the customer the first time. And a key to satisfaction is to eliminate buyer's remorse. Marvin explained that re-affirming the person's buying decision helps here. A simple phone call or letter starting with "you made the right decision and here's why...." can eliminate buyer's remorse, increase satisfaction, and set the customer up to buy from you again.
Referrals: Once you know your customers are happy, you need to ASK for the referral. Marvin differentiates between "planting a seed" and actually asking; and explains that specifically asking is key. A great idea that he mentioned was getting the customer to visualize who they can refer. For example, he gave this example: "I know that you're in the local rotary club - are there any other members of the club that you think could also benefit from this service?"
Requests: Requests are when a prospect specifically requests to work with you, rather than anyone else at your company. When someone specifically requests you, clearly you have a much greater chance of making the sale. One of his keys here was "lagniappe" which is defined as a small, unexpected extra.
Does this work? Well, I'll give you a personal example here. Every Monday I bring bagels into the office. There are two stores from which I can buy bagels. A while back, one of the workers at one of the stores gave me 2 extra bagels at no charge. Since then, I only go to that one bagel store and I always wait for that worker to serve me. Yes, it works.
In the interview, Marvin gave a ton more insight into the 3 R's and also talked about keys to sales team management, how to hire sales staff, and how to get more customer leads and prospects.
You can download or listen to the interview here: http://www.growthinkuniversity.com/members/427.cfm
Or listen to a short clip in the player below: